Investment Thesis
Cirtran Corp exhibits severe financial distress with negative stockholders' equity of -$25.5M, indicating the company is technically insolvent. The company is burning cash at an alarming rate with -$1.0M operating cash flow on just $1.1M revenue, while maintaining $27.5M in total liabilities that far exceed its $1.9M asset base. Revenue has contracted 19.8% YoY and the company is not generating sustainable operations.
Strengths
- Maintains 49.5% gross margin, suggesting potential in product profitability if scaled efficiently
- Generated $533.1K in gross profit despite operational losses
- Minimal insider selling activity (0 Form 4 filings in last 90 days) shows limited confidence but no panic exits
Risks
- Negative equity position of -$25.5M creates existential solvency risk and potential equity wipeout
- Critical liquidity crisis with current ratio of 0.07x and only $19.3K cash against $27.5M liabilities
- Severe operating cash burn of -$1.0M annually combined with declining revenue (-19.8% YoY) makes near-term survival questionable
- Negative interest coverage of -2.2x indicates inability to service debt obligations from operations
- Operating losses of -$403.0K and net losses of -$1.1M suggest business model is fundamentally broken
Key Metrics to Watch
- Cash depletion rate and runway before insolvency
- Ability to refinance or restructure $27.5M liabilities
- Revenue trend reversal and path to positive operating cash flow
- Stockholders' equity recovery and deleveraging progress
Financial Metrics
Revenue
1.1M
Net Income
-1.1M
EPS (Diluted)
$-0.23
Free Cash Flow
-1.0M
Total Assets
1.9M
Cash
19.3K
Profitability Ratios
Gross Margin
49.5%
Operating Margin
-37.4%
Net Margin
-105.6%
ROE
N/A
ROA
-59.4%
FCF Margin
-96.5%
Balance Sheet & Liquidity
Current Ratio
0.07x
Quick Ratio
0.04x
Debt/Equity
N/A
Debt/Assets
1,432.4%
Interest Coverage
-2.18x
Long-term Debt
2.7M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-22T10:30:11.762955 |
Data as of: 2025-09-30 |
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